Bank # is left or right side of engine.
Bank 1 is on cylinder 1 side of the engine

Sensor # is a sensor location down and away from engine.
Sensor 1 is pre cat also called High side
Sensor 2 is post cat also called low side

Sensor 1 on both banks is used for air to fuel mixture measurement after burn cycle.
This sensor(s) is(are) one responsible for working with MAF (mass air flow sensor) to measure fuel/air mixture as it burns.

Sensor 2 is only responsible for catalysis. In other words Sensor 2 tells you if cat is good or bad.

O2 Sensor Identification and Locations - o2 sensors